Legislature(2021 - 2022)ADAMS 519

04/08/2022 01:00 PM House FINANCE

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+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved SB 168 Out of Committee
Heard & Held
Heard & Held
                   HOUSE FINANCE COMMITTEE                                                                                      
                        April 8, 2022                                                                                           
                          1:03 p.m.                                                                                             
1:03:33 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Merrick called the  House Finance Committee meeting                                                                    
to order at 1:03 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Kelly Merrick, Co-Chair                                                                                          
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Ben Carpenter                                                                                                    
Representative Bryce Edgmon                                                                                                     
Representative DeLena Johnson                                                                                                   
Representative Andy Josephson                                                                                                   
Representative Bart LeBon                                                                                                       
Representative Steve Thompson                                                                                                   
Representative Adam Wool                                                                                                        
MEMBERS ABSENT                                                                                                                
Representative Sara Rasmussen                                                                                                   
ALSO PRESENT                                                                                                                  
Senator   Robert   Myers,  Sponsor;   Representative   Grier                                                                    
Hopkins,  Sponsor;  Joe Hardenbrook,  Staff,  Representative                                                                    
Grier Hopkins.                                                                                                                  
PRESENT VIA TELECONFERENCE                                                                                                    
Alan   Weitzner,  Executive   Director,  Alaska   Industrial                                                                    
Development  and Export  Authority, Department  of Commerce,                                                                    
Community  and Economic  Development; Jeff  Schub, Executive                                                                    
Director, Coalition  for Green  Capital; Bert  Hunter, Chief                                                                    
Investment Officer,  Connecticut Green Bank;  Curtis Thayer,                                                                    
Executive Director,  Alaska Energy Authority,  Department of                                                                    
Commerce,   Community   and  Economic   Development;   Elena                                                                    
Sudduth, Manager,  Customer Service and  Marketing, Interior                                                                    
Gas Utility, Fairbanks.                                                                                                         
HB 170    ENERGY INDEPENDENCE PROGRAM & FUND: AIDEA                                                                             
          HB 170 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
HB 307    EXTEND BOND AUTH FOR INTERIOR ENERGY PROJ                                                                             
          HB 307 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
SB 168    DONATIONS/GIFTS FOR DOT&PF SIGNAGE                                                                                    
SB 168  was REPORTED out  of committee with eight  "do pass"                                                                    
recommendations and two  "no recommendation" recommendations                                                                    
and  with one  previously  published zero  fiscal note:  FN1                                                                    
Co-Chair Merrick reviewed the meeting agenda.                                                                                   
SENATE BILL NO. 168                                                                                                           
     "An Act  relating to program receipts;  and relating to                                                                    
     the acceptance of gifts, donations,  and grants for the                                                                    
     purpose  of  providing  signage for  assets  under  the                                                                    
     control of the Department  of Transportation and Public                                                                    
1:04:36 PM                                                                                                                    
Co-Chair  Merrick noted  that the  committee had  previously                                                                    
heard the  bill on April  4, 2022,  and she had  received no                                                                    
amendments.  She  asked  if  the  sponsor  had  any  opening                                                                    
SENATOR  ROBERT MYERS,  SPONSOR, thanked  the committee  for                                                                    
hearing the bill.                                                                                                               
Representative Thompson asked if the  signage had to be paid                                                                    
for before a  naming bill was passed.  Senator Myers replied                                                                    
in the  negative. He  elaborated that  when the  naming bill                                                                    
was drafted it would state  whether signage would be paid by                                                                    
the general fund (GF) or by a third party.                                                                                      
Representative Wool asked if an  effect of the bill would be                                                                    
that a  signing bill  without associated non-GF  funding may                                                                    
have a harder  time passing and it would  become an expected                                                                    
prerequisite  for  a naming  bill.  He  understood that  the                                                                    
funding was  generated after  a naming  bill passed  and not                                                                    
concurrently. Senator Myers stated  his understanding of the                                                                    
question. He deemed that it  would depend on how the sponsor                                                                    
presented the bill. He thought  there were risks both either                                                                    
approaches  and could  see a  scenario  where the  donations                                                                    
fell short.                                                                                                                     
1:08:16 PM                                                                                                                    
Co-Chair  Foster MOVED  to REPORT  SB 168  out of  committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
SB 168  was REPORTED out  of committee with eight  "do pass"                                                                    
recommendations and two  "no recommendation" recommendations                                                                    
and  with one  previously  published zero  fiscal note:  FN1                                                                    
1:08:49 PM                                                                                                                    
AT EASE                                                                                                                         
1:10:36 PM                                                                                                                    
HOUSE BILL NO. 170                                                                                                            
     "An  Act establishing  the  Alaska energy  independence                                                                    
     program and the Alaska  energy independence fund in the                                                                    
     Alaska  Industrial  Development and  Export  Authority;                                                                    
     and providing for an effective date."                                                                                      
1:10:43 PM                                                                                                                    
ALAN   WEITZNER,  EXECUTIVE   DIRECTOR,  ALASKA   INDUSTRIAL                                                                    
DEVELOPMENT  AND EXPORT  AUTHORITY, DEPARTMENT  OF COMMERCE,                                                                    
COMMUNITY  AND  ECONOMIC DEVELOPMENT  (via  teleconference),                                                                    
provided  a  PowerPoint  presentation titled  Alaska  Energy                                                                    
Independence Fund  (AK EIF)  (copy on  file). He  noted that                                                                    
the  fund was  commonly referred  to as  a "green  bank" and                                                                    
that  the  bill  proposed  a   loan  program  within  Alaska                                                                    
Industrial  Development and  Export  Authority (AIDEA)  that                                                                    
was not operated as a bank.                                                                                                     
1:11:38 PM                                                                                                                    
Mr. Weitzner began on slide 2 titled "AIDEA Mission                                                                             
To promote, develop, and advance economic growth and                                                                            
diversification in Alaska by providing various means of                                                                         
financing and investment.                                                                                                       
AIDEA OVERVIEW                                                                                                                  
     Investing in Alaskans since 1967                                                                                           
     Alaska's Development Finance Authority                                                                                     
     Financially Self-Sustaining Public Corporation (no GF                                                                      
     by statute AS 44.88.190(b))                                                                                                
     $446 million in Dividends declared to Alaska since                                                                         
     Directed over $3.5 billion into economic development                                                                       
     in Alaska                                                                                                                  
     ?Revenue generated by AIDEA's investments go to two                                                                      
          1.reinvested in AIDEA programs and projects and                                                                       
          2.issued as dividends to the State of Alaska.                                                                         
     ?AIDEA works with Alaska's communities and businesses                                                                    
     to advance your economic development                                                                                       
          ?Projects must meet two important criteria:                                                                         
               1.be a sustainable financial investment; and                                                                     
               2.create tangible benefits for Alaska and                                                                        
               its communities.                                                                                                 
Mr.  Weitzner   highlighted  that  AIDEA  was   the  state's                                                                    
financing authority and existed  as within the Department of                                                                    
Commerce, Community  and Economic  Development (DCCED)  as a                                                                    
public corporation.                                                                                                             
1:13:30 PM                                                                                                                    
Mr. Weitzner moved to slide 3 titled "AIDEA AS 44.88                                                                            
     It is in the public  interest to promote the prosperity                                                                    
   and general welfare of all citizens of the state by:                                                                         
     (A)  stimulating commercial  and industrial  growth and                                                                    
          expansion  by encouraging  an increase  of private                                                                    
          investment by banks,  investment houses, insurance                                                                    
          companies,   and  other   financial  institutions,                                                                    
          including  pension and  retirement funds,  to help                                                                    
          satisfy the need for economic expansion;                                                                              
     (B)  creating  the  Alaska Industrial  Development  and                                                                    
     Export   Authority  with   the   powers  necessary   to                                                                    
     accomplish  the objectives  stated  in this  paragraph,                                                                    
     including  the power  to issue  taxable and  tax exempt                                                                    
     bonds, to acquire ownership  interests in projects, and                                                                    
     to provide development project financing?                                                                                  
     WITHIN AS 44.88.010 (a)(11)                                                                                                
     it  is  in  the  state's  interest  to  import  private                                                                    
     capital to create new economic  activity that would not                                                                    
     otherwise take place in the state.                                                                                         
Mr.  Weitzner illuminated  that AIDEA  had the  authority to                                                                    
institute the AK EIF. He  believed that AIDEA's statute held                                                                    
the foundational  elements for  creating and  establishing a                                                                    
loan program like the AK EIF.                                                                                                   
Co-Chair Merrick recognized Representative Grier Hopkins in                                                                     
the audience.                                                                                                                   
1:15:25 PM                                                                                                                    
Mr. Weitzner moved to slide 4 titled AIDEA Programs &                                                                           
     Conduit Revenue Bond Program                                                                                               
     Loan Participation Program                                                                                                 
     Development Project Finance                                                                                                
     Sustainable Energy Transmission and Supply (SETS)                                                                          
     Arctic Infrastructure Development Fund(AIDF)                                                                               
     Small  Business  Economic  Development  Revolving  Loan                                                                    
     Rural Development Initiative Loan Fund                                                                                     
     Business Export Assistance Program                                                                                         
Mr.   Weitzne  reminded   the  committee   that  AIDEA   was                                                                    
established in  1967  specifically to  issue Conduit Revenue                                                                    
Bonds  and  had  expanded  over time.  The  reason  for  the                                                                    
expansion  into  broad  platforms  was due  to  the  limited                                                                    
capacity for broad investment in  the state. The corporation                                                                    
was   a  key   driver   for   initiating  private   investor                                                                    
partnerships for  economic development within the  state. He                                                                    
conveyed  that  AIDEA had  82  positions  (PCNs) which  were                                                                    
split between  AIDEA and the Alaska  Energy Authority (AEA);                                                                    
AEA's employees were titled under  AIDEA. He added that both                                                                    
agencies  had  shared  service  employees  for  duties  like                                                                    
accounting and  Information Technology (IT)  services. There                                                                    
were 27 AIDEA  employees focused on the  broad platforms the                                                                    
agency offered across the state.                                                                                                
1:17:09 PM                                                                                                                    
Mr. Weitzner turned to slide 5 titled "AIDEA & AEA:                                                                             
    Alaska Industrial Development and Export Authority                                                                          
     Mission:  To  promote,  develop, and  advance  economic                                                                    
     growth  and  diversification  in  Alaska  by  providing                                                                    
     various means of financing and investment.                                                                                 
     Alaska Energy Authority                                                                                                    
     Mission: To  reduce the cost  of energy in  Alaska. AEA                                                                    
     is  Alaska's   energy  office   and  lead   agency  for                                                                    
     statewide energy policy and program development.                                                                           
     The  purpose and  function of  the AK  EIF aligns  with                                                                    
     AIDEA's  existing  scope  establishing  loan  programs,                                                                    
     working  with  Alaska's  financial sector  and  private                                                                    
     investors, as  well as managing capital  funds, such as                                                                    
     the Loan Participation  Program (Enterprise Development                                                                    
     Account)  and Development  Project Financing  (Economic                                                                    
     Development Account).                                                                                                      
     AIDEA  would   oversee  loan  programs   and  financial                                                                    
     management  in   partnership  with  AEA's   energy  and                                                                    
     technical   subject    matter   expertise,   leveraging                                                                    
     existing shared infrastructure and services.                                                                               
     An  independent,   five-person  advisory   board  would                                                                    
     provide guidance  on investment opportunities  to AIDEA                                                                    
     and  AEA.  The  advisory board's  authority  would  not                                                                    
     supersede  the  governing  authority of  the  AIDEA/AEA                                                                    
Mr. Weitzner indicated  that the bill was a  function of how                                                                    
AIDEA   and  AEA   worked  together.   They  shared   common                                                                    
functions,  a  common  board, and  broadly  collaborated  to                                                                    
facilitate projects  like HB 170  and others. He  noted that                                                                    
both agencies' missions complemented  each other. The Energy                                                                    
Independence   Fund   aligned   with   AIDEA's   scope   and                                                                    
diversified Alaska's  economy by  creating a key  new sector                                                                    
for service  companies focused on renewable  or clean energy                                                                    
development within the state and  aligned with AEA's mission                                                                    
of reducing the  cost of power. The bill added  staff to AEA                                                                    
and AIDEA  to accomplish the  program. He noted he  had been                                                                    
joined by  his colleague Curtis Thayer,  Executive Director,                                                                    
Alaska Energy  Authority, Department of  Commerce, Community                                                                    
and  Economic   Development,  who  could   answer  questions                                                                    
regarding the collaboration.                                                                                                    
Mr. Weitzner advanced  to slide 6 titled  "Total Energy." He                                                                    
discussed that  the need  for AK AIF  was related  to unique                                                                    
issues  in  Alaska;  energy  consumption  and  the  cost  of                                                                    
energy.  The slide  depicted Alaska  as ranked  fourth among                                                                    
states in  per capita  energy consumption and  was currently                                                                    
in  the top  five  for energy  expenditures  per capita.  He                                                                    
noted that  Louisiana was included  in the top 5  states for                                                                    
both  categories  because it  was  a  high energy  producing                                                                    
state  with a  large industrial  base that  utilizes energy.                                                                    
The  other states  had high  energy capacity  or use  due to                                                                    
weather, location, and  transportation issues. Louisiana was                                                                    
a  very high  energy consuming  state with  the highest  per                                                                    
capita energy costs across the United States (US).                                                                              
1:20:32 PM                                                                                                                    
Representative Wool  asked about the consumption  per capita                                                                    
table depicted on slide 6.  He wondered whether it took into                                                                    
consideration  the  full  production   of  North  Slope  oil                                                                    
divided by  Alaska's population. Mr. Weitzner  answered that                                                                    
it was  the consumption within  Alaska, and the  extent that                                                                    
the  state utilized  refined  crude oil.  The  data was  not                                                                    
based on the  total amount of crude  oil shipped externally.                                                                    
Representative Wool  asked about the expenditure  per capita                                                                    
table. He asked how the data accounted for the expenditure.                                                                     
Mr. Weitzner  replied that the numbers  were an aggregation,                                                                    
formulated by the United States  Department of Energy of all                                                                    
the costs  of consumption  for residential,  commercial, and                                                                    
industrial sectors.  He noted that nergy  consumed producing                                                                    
oil on  the North  Slope was included.  The data  included a                                                                    
break down  by the three  specific categories and  the slide                                                                    
depicted the aggregate data.                                                                                                    
1:22:32 PM                                                                                                                    
Mr.   Weitzner   turned   to   slide   7   titled   "Initial                                                                    
Capitalization  and   Funding.He     illuminated   that  the                                                                    
Coalition for  Green Capital was  a main resource  for AIDEA                                                                    
in  formulating the  legislation.  The  agency examined  how                                                                    
different  green banks  were  established  to determine  the                                                                    
proper   size  in   Alaska.  He   studied   the  New   York,                                                                    
Connecticut,  and Montgomery  County green  banks. He  noted                                                                    
that  the Montgomery  County green  bank had  a small  Gross                                                                    
Domestic Product  (GDP) component,  but it was  very active.                                                                    
The  other  green  banks  were  compared  to  Alaska's  GDP,                                                                    
population, and  the total energy consumption  per capita to                                                                    
define what the correct  amount of capitalization was needed                                                                    
to  initiate  the program  that  would  grow via  leveraging                                                                    
participation with local  financial institutions. He pointed                                                                    
to the Targeted Private  Capital Leverage Ratio portrayed on                                                                    
the  slide's table  and explained  that the  success of  the                                                                    
green banks was  through the way they worked  with local and                                                                    
national   financial   institutions   to   leverage   public                                                                    
investment in the green bank.  He reported that the New York                                                                    
green bank  had a 6 to  1 leverage ratio of  private capital                                                                    
to public capital.  The Connecticut green bank  enjoyed an 8                                                                    
to  1 leverage,  and  the Maryland  Montgomery County  Green                                                                    
Bank  had a  7  to 1  ratio. He  anticipated  a $10  million                                                                    
initial  capitalization  from  UGF that  would  subsequently                                                                    
grow  the same  level  of leverage  from Alaska's  financial                                                                    
1:25:34 PM                                                                                                                    
Mr. Weitzner turned to slide  8 titled "Economic Benefits of                                                                    
the  AK EIF    He offered  that the  principal benefit  of a                                                                    
green bank could lower the  cost of energy. Through language                                                                    
concerning sustainable energy  development, the bill focused                                                                    
on the industrial and commercial  needs in key urban centers                                                                    
and  remote  and  rural  communities.  He  deduced  that  it                                                                    
ultimately  lowered the  cost of  living  within the  state,                                                                    
made  the state  more  attractive to  families, and  created                                                                    
jobs within  the clean energy  sector. He noted  the program                                                                    
aligned  with AIDEA's  mission of  diversifying the  state's                                                                    
economy    which    created   employment    and    increased                                                                    
discretionary income.                                                                                                           
1:27:39 PM                                                                                                                    
Mr. Weitzner moved  to slide 9 titled    conomic Benefits of                                                                    
the   AK  EIF.    The  slide   depicted   the  savings   and                                                                    
opportunities  if the  program  achieved  certain levels  of                                                                    
energy reduction. The agency estimated  the state could save                                                                    
up to  10  percent on  total annual energy costs  or $780 on                                                                    
average  per  person and  at  30  percent savings  it  could                                                                    
potentially reduce  annual energy costs by  over $2 thousand                                                                    
per Alaskan.                                                                                                                    
Representative  Wool asked  for the  average annual  cost of                                                                    
energy  per Alaskan  without  the  industrial component.  He                                                                    
inquired what  the average cost for  the residential Alaskan                                                                    
was. Mr. Weitzner  answered that he did not  have the answer                                                                    
but would follow up in writing with the information.                                                                            
Co-Chair Merrick noted the  information would be distributed                                                                    
to the committee.                                                                                                               
Representative Carpenter  asked what sustainable  energy may                                                                    
look like with  the result of 10 percent  energy savings and                                                                    
30  percent  savings  and  how   was  that  achievable.  Mr.                                                                    
Weitzner  replied   that  the  savings  would   be  felt  by                                                                    
individual  consumers  and   businesses  via  lower  monthly                                                                    
utility costs. He relayed that  in Alaskan urban centers, on                                                                    
average  residential energy  costs were  $0.14 to  $0.16 per                                                                    
kilowatt  hour,  which  would be  reduced  and  turned  into                                                                    
discretionary  income that  would  be  reallocated to  other                                                                    
expenses.   He added  that for  businesses the  cost savings                                                                    
for  utilities could  be  used to  expand  the business.  He                                                                    
stated  that   the  largest  benefit   came  in   for  rural                                                                    
communities that were reliant  on diesel and the fluctuating                                                                    
cost  of  oil.  Rural  communities  would  directly  benefit                                                                    
through  energy efficiency  provided  by sustainable  energy                                                                    
that resulted in  lower energy costs. He  offered to provide                                                                    
more  detailed  information  related to  rural  communities'                                                                    
energy costs.                                                                                                                   
1:31:29 PM                                                                                                                    
Representative  Carpenter  cited   the  information  on  the                                                                    
slide, "Frees  up approx.  $570 million  to $1.7  billion in                                                                    
discretionary spending every year    He inquired whether the                                                                    
$570 million  was associated with  a 10 percent  savings and                                                                    
the  $1.7  billion  reflected  a  30  percent  savings.  Mr.                                                                    
Weitzner  directed   attention  to   slide  6   showing  the                                                                    
Department of  Energy total consumption  per million  BTU at                                                                    
839 million  BTU as  the average  consumption per  capita of                                                                    
735,000  average residents  based  on  the expenditures  per                                                                    
capita of $7.797  thousand and noted that was  the data used                                                                    
to produce the savings  projected on slide 9. Representative                                                                    
Carpenter did  not intend  for Mr. Weitzner  to do  the math                                                                    
currently.  He  wanted  to understand  the  slides.  He  was                                                                    
trying  to figure  out  if the  numbers  were a  correlation                                                                    
between the 10  percent and 30 percent  savings depicted and                                                                    
the  $570  million to  $1.7  billion  numbers. Mr.  Weitzner                                                                    
answered in the affirmative.                                                                                                    
Representative  LeBon  referenced  the  Fund  Capitalization                                                                    
fiscal note, published  number 5 and the reference  to a $30                                                                    
million initial investment.  He noted slide 9  referred to a                                                                    
$20 million investment. He inquired  whether the $10 million                                                                    
investment was  separate from the fiscal  note. Mr. Weitzner                                                                    
replied that  there were  two fiscal  notes; one  was passed                                                                    
out of the House Labor  and Commerce Committee (HL&C) at $30                                                                    
million and the initial fiscal  note was appropriated at $10                                                                    
million.  Representative LeBon  asked for  verification that                                                                    
the $10 million was seed  money to launch the program funded                                                                    
through  Undesignated  General  Funds  (UGF).  Mr.  Weitzner                                                                    
replied  affirmatively. Representative  LeBon asked  how the                                                                    
$30  million   played  into  the  situation.   Mr.  Weitzner                                                                    
deferred to  the Co-Chairs of  the HL&C committee  since the                                                                    
amount was amended in committee.                                                                                                
1:35:43 PM                                                                                                                    
AT EASE                                                                                                                         
1:36:38 PM                                                                                                                    
Representative LeBon noted that the  fiscal note was a prior                                                                    
request from  the governor for  $30 million. He  stated that                                                                    
he would remain focused on the $10 million amount.                                                                              
Mr.  Weitzner  turned  to slide  10  titled  "Alaska  Energy                                                                    
Independence Fund                                                                                                               
          "An  Act creating  the Alaska  energy independence                                                                    
          fund  in  the  Alaska Industrial  Development  and                                                                    
          Export Authority;  and providing for  an effective                                                                    
     Make capital more accessible to borrowers for                                                                              
     sustainable energy development projects.                                                                                 
    Partner with private capital to fund businesses and                                                                         
      projects, including energy-efficiency, renewable                                                                          
      power, micro-grid, transportation, sustainable                                                                            
      agriculture, and more.                                                                                                    
     Incentivize co-investment in the non-fossil fuel                                                                           
   energy sector between the public (the State of Alaska                                                                        
     through AIDEA in partnership with Alaska Energy                                                                            
     Authority), Alaska's financial sector, private                                                                             
     investors, and philanthropic donors.                                                                                       
     Aligns with the proposed federal bills, including the                                                                      
     new definition of "sustainable energy development".                                                                        
Mr. Weitzner illuminated that  the definition of sustainable                                                                    
energy in the bill was very  broad and was inclusive of many                                                                    
types of projects.                                                                                                              
1:38:38 PM                                                                                                                    
Representative   Josephson  referenced   sustainable  energy                                                                    
development or   clean energy.  He  noted the  definition in                                                                    
the bill was very broad and  included sun, wind , water, and                                                                    
30 biological processes.  He was told that  other states had                                                                    
a   more  prescriptive   definition  and   employed  tighter                                                                    
guiderails  on   hydro  and  biomass.   He  had   heard  the                                                                    
Connecticut model  used the term   low impact hydro"  in its                                                                    
definition.  He inquired  about  the  broader definition  of                                                                    
sustainable   energy,  particularly   for   water,  in   the                                                                    
legislation  than   the  Connecticut  model.   Mr.  Weitzner                                                                    
highlighted  that in  consultation  with  the Coalition  for                                                                    
Green   Capital,  the   agency  looked   for  the   broadest                                                                    
terminology  that  would  work under  the  defining  federal                                                                    
legislation to  provide the most  opportunity in  the state.                                                                    
He observed  that Alaska had unique  energy requirements. He                                                                    
agreed that other states had  tighter definitions related to                                                                    
clean  energy.  He  elaborated that  Alaska  had  "different                                                                    
issues" and  a green  bank offered  an opportunity  to lower                                                                    
the  cost  of  power  and  create  green  bank  benefits  by                                                                    
increasing diesel generation  efficiency levels and reducing                                                                    
consumption  where diesel  energy  worked in  support of  an                                                                    
alternative  micro-grid.  He   offered  that  other  state's                                                                    
approached  the   definition  to   preclude  that   type  of                                                                    
development. Alaska's rural energy  environment called for a                                                                    
definition that could offer broader  benefits to the state's                                                                    
consumption. He  deferred to  the coalition  and Connecticut                                                                    
Green Bank to further answer the question.                                                                                      
1:42:00 PM                                                                                                                    
JEFF SCHUB, EXECUTIVE DIRECTOR,  COALITION FOR GREEN CAPITAL                                                                    
(via  teleconference),  He  shared that  the  Coalition  for                                                                    
Green  Capital (CGC)  was a  national  nonprofit focused  on                                                                    
supporting  all levels  of  government  in implementing  and                                                                    
operating  public  clean  energy finance  institutions.  The                                                                    
coalition had partnered with the  state for several years to                                                                    
help   develop  the   bill.   He  addressed   Representative                                                                    
Josephson's question. He explained  that every state defined                                                                    
eligible technologies  differently. The foundation  of every                                                                    
state's technological  focus was solar,  building efficiency                                                                    
and upgrades.  Other technologies were employed  but most of                                                                    
the focus  was on distributed solar  and building efficiency                                                                    
and upgrades  representing the largest  market opportunities                                                                    
and   demand   therefore,    contractor   availability   and                                                                    
established  "channels" drove  the investment.  He disclosed                                                                    
that there  was pending federal legislation  to capitalize a                                                                    
$20 billion green  bank that was supported  by the president                                                                    
and passed the House  of Representatives. The national green                                                                    
bank would be  a central national fund to  help create local                                                                    
green banks. The  funding had limits and  constraints on the                                                                    
kinds of  technologies that could  be financed.  He informed                                                                    
the  committee that  former Representative  Don Young  was a                                                                    
co-sponsor   of   the   bill  and   enjoyed   a   "fantastic                                                                    
partnership" with  the coalition. He indicated  that passage                                                                    
of the  bill would  drive much more  funding to  green banks                                                                    
and the HB 170 proposal.                                                                                                        
1:45:32 PM                                                                                                                    
BERT  HUNTER, CHIEF  INVESTMENT  OFFICER, CONNECTICUT  GREEN                                                                    
BANK (via teleconference), spoke to  clean energy and how it                                                                    
was defined  in Connecticut.  He reiterated that  each state                                                                    
took a state  specific view of clean  energy that benefitted                                                                    
and impacted  their state. He relayed  that Connecticut took                                                                    
an  expansive view  of clean  energy except  for low  impact                                                                    
hydropower.  Connecticut  listed   clean  energy  as  solar,                                                                    
geothermal,   wind,  ocean   thermal  energy,   fuel  cells,                                                                    
landfill gas,  low impact hydro, and  other energy resources                                                                    
and  emerging technologies  that  had significant  potential                                                                    
for commercialization and did  not involve the combustion of                                                                    
coal,  petroleum, or  petroleum  products, nuclear  fission,                                                                    
etc.  The definition  also included  electric vehicles  (EV)                                                                    
and charging infrastructure, and alternative fuel vehicles.                                                                     
He  spoke to  low impact  hydro  because of  the many  small                                                                    
rivers in the state.                                                                                                            
Representative Wool referenced the  limits on non-carbon and                                                                    
non-fission in the  definition and asked if  the limits were                                                                    
included in HB 170 as well.  He provided an example of micro                                                                    
nuclear reactors or clean coal.                                                                                                 
Mr. Weitzner answered that the  bill language was crafted to                                                                    
incorporate  what Representative  Wool had  exemplified. The                                                                    
focus  was on  the  unique  energy needs  of  the state  and                                                                    
energy efficiency  to lower the  overall cost of  power. The                                                                    
bill  did not  attempt  to  limit or  define  what could  be                                                                    
covered through loan programs. He  restated that the purpose                                                                    
of  the legislation  was to  create a  loan program  through                                                                    
AIDEA with technical  support from AEA and  working with the                                                                    
private sector  on ways to  improve clean  energy investment                                                                    
and  energy efficiency  investment in  all communities.  The                                                                    
energy programs  needed support  from local  communities and                                                                    
financial   institutions  and   was  broadly   available  to                                                                    
industrial,   commercial,  and   residential  consumers   of                                                                    
1:50:24 PM                                                                                                                    
Representative  LeBon cited  slide 10  and inquired  how the                                                                    
Alaska  banking  community   including  credit  unions  were                                                                    
partnering on the project and  what the state's expectations                                                                    
were  for   the  state's  financial  sector.   Mr.  Weitzner                                                                    
answered that they saw the  project as directly working with                                                                    
the   state's   financial   institutions.   He   asked   for                                                                    
elaboration by Mr. Hunter.                                                                                                      
Mr.  Hunter  furthered  that Connecticut  Green  Bank  (CGB)                                                                    
partnered  with   community  banks  and  credit   unions  to                                                                    
implement a loan loss reserve  so the financial institutions                                                                    
could  provide  loans  to support  the  investment  by  home                                                                    
owners  for  renewable  energy  and  energy  efficiency.  He                                                                    
reported that over  the eight years the program  had been in                                                                    
operation  it had  resulted  in over  $90  million in  loans                                                                    
provided to homeowners in Connecticut.  The loss reserve had                                                                    
only paid out $150 thousand,  which was 0.2 percent in total                                                                    
and not per  annum. He emphasized that  the high performance                                                                    
of  the  loans allowed  them  to  attract new  customers  to                                                                    
financial institutions.  The green  bank was  "popular" with                                                                    
Connecticut's financial institutions  and relayed to bankers                                                                    
that the green bank was  established to partner with private                                                                    
capital and  not to displace  what the institutions  did but                                                                    
to enable them  to participate in the  clean energy economy.                                                                    
He furthered  that $2.3  billion was  invested in  the state                                                                    
using only $300 million of public resources.                                                                                    
1:53:40 PM                                                                                                                    
Representative LeBon  asked if Mr. Hunter  was familiar with                                                                    
the  Community Reinvestment  Act  (CRA)  requiring banks  to                                                                    
invest in  their communities.  He wondered  if participation                                                                    
in  green banks  could  qualify banks  for  CRA points.  Mr.                                                                    
Hunter  replied in  the affirmative.  He qualified  that the                                                                    
organization  had studied  the  issue  extensively with  the                                                                    
Connecticut Banking  Commissioner to determine that  as long                                                                    
as the investment  was located in the  qualifying CRA census                                                                    
tracks it did count.                                                                                                            
Representative  Wool  referenced  slide 10  related  to  the                                                                    
second  bullet point  stating "Incentivize  co-investment in                                                                    
the non-fossil fuel energy sector?"  and the bolded language                                                                    
 sustainable   energy  development     He  also   cited  Mr.                                                                    
Weitzner's  answer to  a prior  question stating  clean coal                                                                    
would be eligible.  He wanted to clarify that  was the case.                                                                    
He knew the  bill was not called a green  bank whereas other                                                                    
states  did call  it a   green bank"  not related  to fossil                                                                    
fuel  or  greenhouse  gases.   He  reiterated  his  question                                                                    
whether the  bill was  eligible for  a fossil  fuel project.                                                                    
Mr.  Weitzner answered  in the  affirmative  and added  that                                                                    
sustainable  energy  development   was  broadly  defined  to                                                                    
address the unique energy requirements in the state.                                                                            
1:55:45 PM                                                                                                                    
Mr.  Weitzner  turned  to slide  11  titled  "ALASKA  ENERGY                                                                    
INDEPENDENCE  FUND (AK  EIF)   and  discussed financing  and                                                                    
     Financing and Investments                                                                                                  
     The Fund would leverage  its capital alongside Alaska's                                                                    
     financial  sector   to  enhance  total   investment  in                                                                    
     Alaskan clean energy programs and projects.                                                                                
     Eligible  to  make  loans, provide  credit  enhancement                                                                    
     structures,   purchase   loans,   provide   development                                                                    
     funding and  other forms  of financing  for sustainable                                                                    
     energy    development     in    Alaska's    commercial,                                                                    
     residential, and industrial market sectors.                                                                                
     The Fund  would consist  of appropriations made  by the                                                                    
     legislature, loans  or other assets transferred  to the                                                                    
     Fund  by AIDEA,  unrestricted loan  payments, interest,                                                                    
     or other income earned  on loans, investments or assets                                                                    
     of the fund, and available federal funding.                                                                                
Mr.  Weitzner  explained   how  the  initial  capitalization                                                                    
within AIDEA  and financial institution investment  would be                                                                    
utilized. He  noted that through the  collaboration with CGB                                                                    
and the  CGE it highlighted  how the loan programs  could be                                                                    
put in place. He  highlighted that another important element                                                                    
of the bill  was the establishment of  an advisory committee                                                                    
with  members from  across the  state that  included members                                                                    
from financial institutions. The  committee would advise how                                                                    
to  put the  loan programs  together to  facilitate reaching                                                                    
the need  and examine the best  practices of how to  grow it                                                                    
through successful  green banks.  He stressed that  the role                                                                    
of  public  finance was  in  credit  enhancement, loan  loss                                                                    
reserves, and  creating elements of structuring  that worked                                                                    
with  local financial  capital for  residential, industrial,                                                                    
and commercial  users. The  relationships with  the existing                                                                    
financial sector  was important  to establish the  best uses                                                                    
of the  loan program  for the utilizers  and the  ability to                                                                    
build  onto the  capital base  with different  programs. The                                                                    
appropriation  to capitalize  the  fund  was the  foundation                                                                    
capital that would create the  structures to expand the loan                                                                    
1:58:45 PM                                                                                                                    
Mr.   Weitzner  advanced   to  slide   12  titled     rogram                                                                    
Workflow." The slide depicted AIDEA's  role with the initial                                                                    
capitalization of the fund. The  agency would solely utilize                                                                    
the fund  for green  bank programs and  establish underlying                                                                    
investment  vehicles that  worked  directly  with the  local                                                                    
financial  institutions   and  create  the   different  loan                                                                    
programs.  The programs  were structured  to meet  a certain                                                                    
issue  and  the  loans  were  structured  for  the  specific                                                                    
2:00:01 PM                                                                                                                    
Mr. Weitzner  concluded the presentation on  slide 13 titled                                                                    
"Functions  of the  Fund." He  maintained  that the  program                                                                    
would address issues that created  barriers to investment or                                                                    
perceived  higher   risk.  Therefore,  AIDEA   would  create                                                                    
structures  that provided  credit  enhancement to  financial                                                                    
institutions.  In  addition,   the  agency  would  establish                                                                    
broader  pools or  coalitions to  address inefficiencies  of                                                                    
scale  by  aggregating  small  projects  to  meet  scale  to                                                                    
attract private capital. He  delineated that another barrier                                                                    
to  investment was  first-in-kind  transactions where  AIDEA                                                                    
would  work with  AEA on  technical support  to address  the                                                                    
issue.  Another  barrier  was marginal  economics,  and  the                                                                    
agency  would  work  to enhance  service  sector  businesses                                                                    
through co-investment with AIDEA.                                                                                               
Representative Edgmon  thanked Mr.  Weitzner and  others for                                                                    
the presentation. He  used the infusion of  federal money to                                                                    
improve  the state's  broadband for  comparison. He  took  a                                                                    
bit of  umbrage  with the  term independent in the  bill. He                                                                    
was familiar with the state's  energy issues and stated that                                                                    
the  only way  Alaska  could become  energy independent  was                                                                    
through  development  of its  natural  gas.  He opined  that                                                                    
those   other  forms   of  energy   would   be  a   marginal                                                                    
contribution to  energy independence.  He clarified  that he                                                                    
was  not  making  negative  comments   about  the  bill  but                                                                    
wondered how the word   independence" became associated with                                                                    
the legislation and wondered why  not merely call it a green                                                                    
bank or  clean energy  fund. He asked  Mr. Weitzner  to help                                                                    
convince  a rural  resident how  a  $10 million  capitalized                                                                    
fund  tied  to financial  returns  from  the private  sector                                                                    
would get  rural Alaska  energy independent  without natural                                                                    
gas. Mr.  Weitzner replied that  the term  independence came                                                                    
from  the  idea  that  Alaskans could  make  an  independent                                                                    
decision on  their own energy  choice by undertaking  a loan                                                                    
for energy efficiency or source  solar panels. He maintained                                                                    
that   the  bill   enabled  Alaskans   to  make   their  own                                                                    
independent choices  on their energy resources  and that was                                                                    
how  the word  was included.  He noted  the House  Labor and                                                                    
Commerce  Committee  had  changed  the name  to  the    lean                                                                    
Energy Fund                                                                                                                     
2:05:18 PM                                                                                                                    
Representative Edgmon  asked why  the entire effort  was not                                                                    
being   tied  to   goals,  objectives,   and  outcomes.   He                                                                    
referenced  broadband as  a comparison  that  had goals  and                                                                    
outcomes. He supported the venture,  but he thought the bill                                                                    
was  being  overstated   in some  ways. Mr.  Weitzner agreed                                                                    
there  was  not  independence  in  the  existing  policy  as                                                                    
written.  The reference  was written  to policy  targets for                                                                    
clean energy  that the legislature  had enacted  and thought                                                                    
that  the   term  would  align  through   creating  economic                                                                    
diversity.  Representative Edgmon  liked the  fact that  the                                                                    
bill had  a clean energy  program and an advisory  board. He                                                                    
emphasized that there  were no goals and  objectives tied to                                                                    
the legislation. He ascertained that  the bill was a banking                                                                    
bill under  the moniker  of energy,  he characterized  it as                                                                    
"sort  of clean  energy, but  it's really  not clean  energy                                                                    
because it's  economic development first." He  did not think                                                                    
HB 170 was the complete  package. Mr. Weitzner answered that                                                                    
the  administration had  principally  focused  on the  green                                                                    
bank legislation  in other states  that had  been successful                                                                    
and  attempted  to  tailor  the programs  to  how  it  would                                                                    
function  within AIDEA  and Alaska's  statutes. It  had been                                                                    
the driving force of the legislation.                                                                                           
2:08:10 PM                                                                                                                    
Representative  Edgmon appreciated  the legislation.  He saw                                                                    
an environment  in rural Alaska  where diesel would  rule in                                                                    
rural Alaska  for many years.  He remained  unconvinced that                                                                    
an  Anchorage bank  would  provide  a loan  with  a  9 to  1                                                                    
leverage ratio and change things in rural Alaska.                                                                               
Representative  Carpenter  referenced independent  decisions                                                                    
by Alaskans to put solar  panels on their rooves. He deduced                                                                    
that  the many  feet  of snow  that fell  on  houses in  the                                                                    
winter reducing solar  panels to function for  only 6 months                                                                    
out of the year would likely be a bad investment for many.                                                                      
He  stated that  the "devil  was in  the details"  regarding                                                                    
what  technologies  would  work.  He  deduced  that  it  was                                                                    
unknown  whether traditional  or alternative  energies would                                                                    
work. He  wondered what the  bill was trying  to accomplish.                                                                    
He understood the  concept and it sounded  beneficial to put                                                                    
$10 million  in a fund  to eventually generate  $570 million                                                                    
to $1  billion of  savings in the  future. He  was uncertain                                                                    
what technologies  were implied or possible.  He stated that                                                                    
if it was left up to  the decisions by individuals, he could                                                                    
not  envision  the  complete plan.  He  favored  lower  cost                                                                    
energy but  admitted that the  most reasonable way  to drive                                                                    
down the  cost of  energy in the  state was  through natural                                                                    
gas. He deemed that another focus was a "distraction                                                                            
2:11:06 PM                                                                                                                    
Mr.  Weitzner  responded that  if  the  bill created  energy                                                                    
efficiency  within  the  definition  of  sustainable  energy                                                                    
development and  reduced the amount  of energy  consumed but                                                                    
still met demand the savings  would occur. He recounted that                                                                    
the  way a  green  bank  and the  proposed  fund worked  was                                                                    
through  a  loan  program  that   made  low  cost  financing                                                                    
available that  enabled consumers  to make their  own energy                                                                    
choices.  The   bill  incentivized   capital  and   made  it                                                                    
available for  consumers desiring  to lower their  costs and                                                                    
monthly  spend  on  energy consumption.  The  loan  programs                                                                    
would offer cost effective financing  for the individual. He                                                                    
noted that  energy efficiency could  include other  forms of                                                                    
energy;  however,  wind,  solar,  and  hydro  products  were                                                                    
developing  via   micro-grids  in  rural   communities  that                                                                    
reduced overall  diesel consumption.  He asked if  Mr. Schub                                                                    
could explain how existing green banks were effective.                                                                          
Mr.  Schub  interjected  that   the  number  one  investment                                                                    
through green  banks was in  energy efficiency  in buildings                                                                    
(representing over 50 percent  of all green bank investments                                                                    
across the country) to lower  the energy cost no matter what                                                                    
energy source  was used.  He maintained  that the  first and                                                                    
cheapest way  to lower  energy cost was  to use  less energy                                                                    
via   installation  of   energy   efficiency  measures.   He                                                                    
emphasized that it was not  a question of whether more clean                                                                    
energy or  fossil fuel based  energy was installed  the goal                                                                    
was helping  to lower energy  costs as much as  possible. He                                                                    
indicated  that  considering  the energy  situation  in  the                                                                    
state,  lowering energy  costs  through building  efficiency                                                                    
was clearly the largest  market opportunity. He agreed there                                                                    
was not  a specific plan  in the legislation.  He elaborated                                                                    
that  very few  green  bank bills  in  the country  included                                                                    
specific   investment   plans   in  the   legislation.   The                                                                    
institutions  were meant  to respond  to  market inputs  and                                                                    
consumer demand.  The market  need and  existing opportunity                                                                    
among consumers  and installers  drove where  the investment                                                                    
went,  which tended  to be  energy  efficiency. He  expected                                                                    
energy efficiency to be the main focus of the program.                                                                          
2:15:23 PM                                                                                                                    
Representative Carpenter  thought he  had heard  earlier the                                                                    
bill was  not creating a  green bank.  He asked if  the bill                                                                    
was creating  a green  bank. Mr. Schub  replied that  he had                                                                    
used the  term too casually  and it was an  over generalized                                                                    
Representative LeBon deduced that  the banking community had                                                                    
to be "on  board" for the program to  succeed. He referenced                                                                    
slide  13  that  cited  project  risk,  credit  enhancement,                                                                    
providing loan  loss reserves,  reduced risks,  allow longer                                                                    
terms at  lower rates, etc.  He asked if the  Alaska Bankers                                                                    
Association  had weighed  in formally  on  the program.  Mr.                                                                    
Weitzner answered  that AIDEA had  met with  the association                                                                    
several times on the topic  and provided information. He had                                                                    
not   seen   any   formal  opinion   by   the   association.                                                                    
Representative  LeBon spoke  to  the  importance of  knowing                                                                    
where the banking  community stood on the program  for it to                                                                    
2:17:19 PM                                                                                                                    
Representative   Wool    voiced   that   he    agreed   with                                                                    
Representative  Edgmon's  statements.   He  noted  that  the                                                                    
committee had a presentation  recently on the Infrastructure                                                                    
Investment  and Jobs  Act (IIJA)  funding [February  3, 2022                                                                    
and  April 7,  2022]. He  recalled that  the Alaska  Housing                                                                    
Finance  Corporation (AHFC)  was appropriated  a significant                                                                    
amount of  money for  energy efficiency.  He deemed  that HB
170 was in  competition with IIJA funding that  was free and                                                                    
not a  loan program and  there were currently  many programs                                                                    
for  energy  efficiency.  He understood  the  bill  was  not                                                                    
called a  green bank because  some of the  included projects                                                                    
were  not  very  "green."  He   asked  whether  fossil  fuel                                                                    
projects were acceptable in other states with green banks.                                                                      
Mr. Schub responded  that some of the  institutions were not                                                                    
referred to  as green banks,  some were called  clean energy                                                                    
funds  or  clean  energy  access  funds.  Some  green  banks                                                                    
allowed certain projects to hook  into a central utility for                                                                    
natural gas.  He recalled  that across the green bank system                                                                    
none  of   the  projects  had  financing   for  fossil  fuel                                                                    
projects. He related that the  main reason was much existing                                                                    
financing  was available  for  fossil  fuel projects.  Green                                                                    
bank  projects  were   economically  viable  but  structural                                                                    
financial barriers prevented  private capital from financing                                                                    
them on  their own, which was  not the case for  fossil fuel                                                                    
2:20:43 PM                                                                                                                    
Mr. Hunter interjected that CGB  financed projects that used                                                                    
fossil  fuels regularly.  He elucidated  that  the types  of                                                                    
projects  were replacing  low  efficiency  gas boilers  with                                                                    
high efficiency gas boilers or  natural gas conversions. The                                                                    
green bank also supported combined  heat and power where the                                                                    
fuel source  was fossil based,  principally natural  gas. He                                                                    
relayed that  it was his state    objective to get to  a net                                                                    
zero in  power generation by 2040  and the goal was  to wean                                                                    
the state off  natural gas to the  extent practicable. There                                                                    
was no  oil or  shale in  Connecticut and  CGB would  not be                                                                    
permitted to  use funds for extractive  purposes or pipeline                                                                    
Representative   Wool   supported  any   energy   efficiency                                                                    
improvement,  whether it  involved hydrocarbons  or not.  He                                                                    
acknowledged  the unique  energy  challenges  in Alaska.  He                                                                    
interposed,  in   relation  to   Representative  Carpenter's                                                                    
remarks that snow on a roof  was very reflective and was not                                                                    
bad for solar panels.                                                                                                           
2:23:53 PM                                                                                                                    
Mr.  Weitzner stated  that Representative  Wool was  correct                                                                    
that  through IIJA  there was  significant  amount of  grant                                                                    
funding and he  expected it was the funding  of first choice                                                                    
for communities.  He elaborated  that the  funding allocated                                                                    
to  Alaska Housing  Finance  Corporation  (AHFC) for  energy                                                                    
efficiency was  restricted to  residential use.  The funding                                                                    
did not  benefit the industrial and  commercial consumers in                                                                    
the state.  The development of  the green bank  was intended                                                                    
to offer cost effective financing over the long haul.                                                                           
2:25:16 PM                                                                                                                    
Representative   Josephson  asked   if  the   administration                                                                    
considered having the AEA operate  the program when drafting                                                                    
the  bill. He  deduced that  the program  aligned more  with                                                                    
AEA' core mission  and it currently offered  loans and grant                                                                    
programs.  Mr. Weitzner  responded in  the affirmative.  The                                                                    
authority to  create a green  bank like funding  program was                                                                    
contained in  AIDEA's statutes. The  ability to  engage with                                                                    
the financial  community existed  in AIDEA's  authority. The                                                                    
technical  components were  under the  purview of  AEA. It's                                                                    
grant and  loan programs  were administered  through AIDEA's                                                                    
staff. He deferred to AEA for further clarification.                                                                            
CURTIS THAYER, EXECUTIVE  DIRECTOR, ALASKA ENERGY AUTHORITY,                                                                    
DEPARTMENT OF  COMMERCE, COMMUNITY AND  ECONOMIC DEVELOPMENT                                                                    
(via   teleconference),   concurred  with   Mr.   Weitzner's                                                                    
remarks. He  cited discussions that  concluded the  bill was                                                                    
primarily  a finance  bill for  infrastructure and  economic                                                                    
development and  better fit within AIDEA.  The bill included                                                                    
AEA where  it augmented  the program,  especially concerning                                                                    
rural  Alaska. He  noted that  AEA operated  the Power  Cost                                                                    
Equalization   (PCE)  program   and   was  responsible   for                                                                    
powerhouses, bulk  fuel, and  alternative energy  in roughly                                                                    
200  rural Alaskan  communities.  He  emphasized that  AEA's                                                                    
expertise laid in rural Alaska.                                                                                                 
Mr.  Weitzner   elaborated  on   Representative  Josephson's                                                                    
question. He  indicated that energy  was an area  that AIDEA                                                                    
often collaborated with AEA.                                                                                                    
Representative   Josephson   deduced   that  many   of   the                                                                    
alternative energy projects would  exist in rural Alaska. He                                                                    
asked  if   there  had  been  any   consideration  given  to                                                                    
expanding the  capitalization of  the Renewable  Energy Fund                                                                    
since the  template already  existed. Mr.  Weitzner answered                                                                    
that  the focus  had been  on establishing  legislation that                                                                    
would facilitate federal  and state funding to  grow a green                                                                    
bank  in  Alaska,  which  better  fit  AIDEA's  purview.  He                                                                    
addressed  Representative   Josephson's  comments  regarding                                                                    
where  the projects  would occur.  He explained  that energy                                                                    
efficiency  benefitted all  areas  of the  state; urban  and                                                                    
rural. He  reported that the  AK EIF could  support programs                                                                    
like the  Commercial Property-Assessed Clean  Energy (CPACE)                                                                    
program  that existed  in urban  areas and  support programs                                                                    
providing  equivalent  support   in  rural  communities.  He                                                                    
deferred to Mr. Hunter for further clarification.                                                                               
2:30:40 PM                                                                                                                    
Mr. Hunter expounded that the  investments would be specific                                                                    
to  individual   states.  He  restated  that   most  of  CGB                                                                    
investments  were  for  individual  buildings;  residential,                                                                    
commercial, and  industrial. He reported that  40 percent of                                                                    
greenhouse gas  emissions were  generated from  the building                                                                    
sector,  roughly 35  percent  were  from the  transportation                                                                    
sector.   The  CGB   was  focused   on   those  two   areas,                                                                    
approximately 60 percent  of the funding was  for solar, and                                                                    
the balance was in general energy efficiency.                                                                                   
2:32:12 PM                                                                                                                    
Co-Chair Merrick handed the gavel to Vice-Chair Ortiz.                                                                          
Representative  Thompson relayed  that a  few years  ago the                                                                    
University of Alaska  in Fairbanks replaced its  50 year old                                                                    
coal generated power  plant to a more  energy efficient coal                                                                    
power  plant.  The  coal  plant  cut  the  emissions  by  50                                                                    
percent. He wondered if a  similar project would be eligible                                                                    
under the bill.                                                                                                                 
2:33:23 PM                                                                                                                    
Mr. Weitzner replied  that the use of coal  under the energy                                                                    
efficiency   umbrella   would    be   eligible   under   the                                                                    
legislation.  He  qualified  that  the  type  of  investment                                                                    
necessary  for such  a large  project would  not likely  fit                                                                    
within the AK EIF program.                                                                                                      
Representative  Carpenter   asked  whether  AIDEA   had  the                                                                    
authority to use  its own funding to capitalize  the fund or                                                                    
if  GF  was  necessary.  Mr.  Weitzner  responded  that  the                                                                    
legislation   proposed   that   the  initial   funding   was                                                                    
appropriated  via  Unrestricted  General  Funds  (UGF),  but                                                                    
AIDEA  receipts  could  be  used to  grow  the  program.  He                                                                    
explained  that  all the  various  funds  within AIDEA  were                                                                    
initially capitalized via  state appropriation. In addition,                                                                    
all  green  banks  were   initially  funded  through  public                                                                    
funding  representing  the  public policy  support  for  the                                                                    
program.   He   highlighted    that   AIDEA's   funds   were                                                                    
legislatively defined  as being  separate from the  funds of                                                                    
the  state. The  state's  initial appropriation  for HB  170                                                                    
would  be  made outside  of  AIDEA's  dividend covenant.  He                                                                    
delineated  that as  a development  finance authority  AIDEA                                                                    
was able to  issue debt in its own capacity  via statute and                                                                    
needed  to establish  independent  financial integrity  with                                                                    
credit rating agencies.                                                                                                         
2:36:40 PM                                                                                                                    
Representative  Edgmon spoke  to the  issue of  seed funding                                                                    
and the contemplation  of an initial $10 million  to get the                                                                    
project going.  He asked  if there had  been an  analysis on                                                                    
initially  capitalizing  the fund  at  $40  million to  $100                                                                    
million  to   build  the   relationship  with   the  banking                                                                    
community. He pondered why $10  million and not $50 million.                                                                    
Mr.  Weitzner  highlighted  slide  7  showing  a  comparison                                                                    
between  existing and  successful green  banks based  on GDP                                                                    
and the  level of  initial funding  and they  had identified                                                                    
$10 million as the appropriate  amount of initial capital to                                                                    
allow  growth over  time. He  elaborated that  he wanted  to                                                                    
take  a  conservative  approach  in  the  level  of  initial                                                                    
funding in case the fund was  not able to grow as quickly as                                                                    
anticipated  to avoid  AIDEA incurring  additional reporting                                                                    
obligations by the legislature.                                                                                                 
Mr. Hunter  interjected that  he supported  AIDEA's position                                                                    
for a  conservative approach. He  asked everyone to  keep an                                                                    
open mind on the topic,  particularly in the near future. He                                                                    
believed the  effort would be tremendously  successful if it                                                                    
passed. He  offered perspective  from the  CGB's experience.                                                                    
He  reported  that  CGB  repurposed  $70  million  from  the                                                                    
state's  clean energy  fund into  its capital  base and  the                                                                    
legislature  appropriated  one tenth  of  one  penny to  the                                                                    
green  bank  from  all  electric bills  in  the  state  that                                                                    
totaled $27 million  annually as well as a share  of its cap                                                                    
and  trade carbon  emissions programs  providing $3  million                                                                    
annually. Connecticut  granted $100 million in  seed capital                                                                    
to  CGB in  a state  with a  population of  3.5 million.  He                                                                    
reported that the CGB had  45 staff and invested the balance                                                                    
in  transactions. The  green bank  had bonding  authority to                                                                    
issue taxable  and tax  exempt bonds.  During its  last bond                                                                    
issue, CGB  attracted $100 million  in bids for  $25 million                                                                    
in available bonds  and half of the bonds  were purchased by                                                                    
citizen  investors  across  the  state and  nation.  He  was                                                                    
certain  Alaska's  program   could  attract  the  additional                                                                    
investment. He  emphasized that it  was important to  have a                                                                    
good capital base because the  rating agencies would look at                                                                    
the sustainability  of the bonding entity.  He declared that                                                                    
"the endeavor would be rewarded  for being bold." The key to                                                                    
CGB's success was its capable  staff, the flexibility of its                                                                    
enabling  statutes,   and  a  strong  capital   base,  which                                                                    
empowered  it  to  attract significant  amounts  of  private                                                                    
capital. He stated  that "it takes money to  make money" and                                                                    
the  saying applied  to clean  energy projects.  Connecticut                                                                    
Green  Bank    $250  million balance  sheet  represented  an                                                                    
endowment  for  the  benefit of  the  state's  citizens.  He                                                                    
stressed that no private equity  investors were walking away                                                                    
with CGB's investment    it belonged to the  citizens of the                                                                    
state.   He  asserted   that  Alaska's   program  would   be                                                                    
investments  for the  citizens  of the  state  and not  give                                                                    
2:42:42 PM                                                                                                                    
Representative  Edgmon  referenced the  phrase  "underserved                                                                    
communities" in the  bill. He asked if the  term was defined                                                                    
in statute.  Mr. Weitzner  could not  recall the  answer and                                                                    
would   follow   up   in  writing.   Representative   Edgmon                                                                    
discovered that  there was  a definition  in the  CRA, which                                                                    
was referenced  earlier by Representative  LeBon that  was a                                                                    
federal banking act relative  to underserved communities. He                                                                    
referenced broadband  and noted that the  federal definition                                                                    
of unserved  versus underserved  was explicitly  defined. He                                                                    
admitted  that  he  was  biased  and  represented  southwest                                                                    
Alaska  and  was "struggling"  to  understand  how the  bill                                                                    
could accomplish  anything for  rural Alaska. He  noted that                                                                    
existing  green banks  were tied  to the  transportation and                                                                    
building  sectors.  He  guessed  that the  issues  of  rural                                                                    
Alaska were not conducive to private investment.                                                                                
2:45:06 PM                                                                                                                    
Vice-Chair  Ortiz  referenced   existing  green  bank  funds                                                                    
developed  across  the  country.   He  asked  if  fuel  cell                                                                    
technology  had been  integrated  anywhere  with green  bank                                                                    
funding.  Mr. Hunter  replied  affirmatively. He  elaborated                                                                    
that   CGB  invested   $200  million   in   fuel  cells   in                                                                    
Connecticut. He  noted that the  state was home to  two fuel                                                                    
cell manufacturers;  Fuel Cell  Energy and Doosan.  He noted                                                                    
that   the   third   fuel  cell   manufacturer   was   Bloom                                                                    
Technologies   in   California.   He  furthered   that   the                                                                    
Connecticut  companies used  natural gas  as its  feed stock                                                                    
and  would  eventually  transfer  to  using  clean  hydrogen                                                                    
within 5 to 7 years when it was fiscally sustainable.                                                                           
Mr. Weitzner interjected that  the definition of sustainable                                                                    
energy  development   in  HB  170  incorporated   fuel  cell                                                                    
technology  and anticipated  it to  be largely  a micro-grid                                                                    
Representative Wool asked how  AIDEA would inform the public                                                                    
about the programs and if  it provided support to interested                                                                    
2:48:25 PM                                                                                                                    
Mr. Hunter used Connecticut as  an example. He highlighted a                                                                    
statewide  program   called   Energize  CT   that   was  the                                                                    
umbrella  organization  the  partnered   with  CGB  and  the                                                                    
state's electric  and gas utilities  which provided  all the                                                                    
information  regarding all  of the  state's energy  programs                                                                    
and  served  as  one  central   source  of  information.  He                                                                    
furthered  that  when CGB  started  there  were 6  different                                                                    
websites;  it  was  confusing  and  stymied  the  uptake  of                                                                    
investment. The situation  instigated the collaboration that                                                                    
created the Energize CT Program.  The utilities and CGB also                                                                    
employed social media and the  green bank had an informative                                                                    
web page for  its programs and bonding. The  green bank also                                                                    
reached  out to  contractors to  offer training  and updates                                                                    
for  the  programs  it  offered.   He  explained  that  once                                                                    
contacted  by the  homeowners, the  contractor assessed  the                                                                    
problem,  defined  the solution,  and  matched  it with  the                                                                    
proper financing program.                                                                                                       
2:51:26 PM                                                                                                                    
Representative Wool  stated he was curious  about the Alaska                                                                    
specific approach. He  noted all of the  programs Alaska had                                                                    
to  offer  and  wondered  how the  information  could  reach                                                                    
people and how they  could navigate through the information.                                                                    
He asked  if Alaska  had a  similar entity  to Connecticut's                                                                    
Energize  CT.  Mr.  Hunter responded  that  he  offered  his                                                                    
remarks  as guidance  for Alaska,  since the  state did  not                                                                    
currently   have   a    similar   program   to   disseminate                                                                    
information. He noted  that green banks in  other states set                                                                    
up a similar way to inform the public.                                                                                          
Mr.  Weitzner   added  that  Representative  Wool   made  an                                                                    
excellent point. He reiterated that  there was not a central                                                                    
point of  information dissemination of all  the programs the                                                                    
state offered.  He stated  that the bill  did not  solve the                                                                    
problem but  AIDEA would look  to incorporate  a centralized                                                                    
information  system.  In  regards  to the  issue  for  rural                                                                    
Alaska, he informed  the committee that in Section  2 of the                                                                    
bill; AS.44.83.055  created an  analyst position  within AEA                                                                    
who's  role  would  solely  be  to  work  with  and  educate                                                                    
Alaska's rural  communities regarding  the programs  and how                                                                    
to access Alaska's AK EIF programs.                                                                                             
2:55:06 PM                                                                                                                    
Representative   Carpenter    provided   a    scenario.   He                                                                    
exemplified  an  Alaskan  homeowner who  wanted  to  upgrade                                                                    
their  windows or  heating system  through federal  or state                                                                    
programs,  or  bank  loans.  He  wondered  if  the  capacity                                                                    
currently existed.  He asked the  same question  regarding a                                                                    
business.  Mr.  Weitzner  answered that  currently  programs                                                                    
existed in different levels of  capacity. He elaborated that                                                                    
it depended on  the borrower's loan capacity.  He noted that                                                                    
there  were programs  through AHFC  for residential  owners.                                                                    
Regarding  businesses, the  programs  also  depended on  the                                                                    
businesses'  loan capacity.  He  voiced that  the intent  of                                                                    
Alaska's program  was to create additional  avenues that did                                                                    
not  rely solely  on the  individual's capacity  to take  on                                                                    
HB  170  was  HEARD  and   HELD  in  committee  for  further                                                                    
2:58:01 PM                                                                                                                    
AT EASE                                                                                                                         
3:12:09 PM                                                                                                                    
HOUSE BILL NO. 307                                                                                                            
     "An  Act  relating to  the  financing  and issuance  of                                                                    
     bonds  for a  liquefied natural  gas production  system                                                                    
     and natural gas distribution  system; and providing for                                                                    
     an effective date."                                                                                                        
3:12:18 PM                                                                                                                    
REPRESENTATIVE  GRIER   HOPKINS,  SPONSOR,   introduced  the                                                                    
legislation. He read from a prepared statement:                                                                                 
     I'm pleased  to offer HB  307 -  a simple bill  that is                                                                    
     part  of  a  long-term,  comprehensive,  and  paradigm-                                                                    
     shifting solution to a difficult problem.                                                                                  
     In 2009,  the  U.S.   Environmental  Protection  Agency                                                                    
     (EPA) designated  portions of the Fairbanks  North Star                                                                    
     Borough (FNSB) as a nonattainment  area for air quality                                                                    
     related to  PM2.5. Since that time,  the communities of                                                                    
     Fairbanks and  North Pole, State  of Alaska,  AIDEA and                                                                    
     the Interior Gas Utility have  been actively engaged in                                                                    
     expanding  the  availability  and use  of  natural  gas                                                                    
     through   the  Interior   Energy  Project,   a  project                                                                    
     designed  to   bring  lower-cost  energy  to   as  many                                                                    
     Interior  residents  and  businesses  as  possible,  as                                                                    
     quickly as possible.                                                                                                       
     A critical component of the  Interior Energy Project or                                                                    
     IEP  is  financing for  the  development  of a  unified                                                                    
     public gas  utility with competitive  rates. SB  23 was                                                                    
     passed by  the 28th  Alaska Legislature in  2013 giving                                                                    
     the  Alaska  Industrial Development  Authority  (AIDEA)                                                                    
     the  ability   to  provide  financing  tools   for  the                                                                    
     development of the IEP, including  the ability to issue                                                                    
     up to  $150 million  in conduit  revenue bonds  to help                                                                    
     develop  an   integrated  natural  gas   supply  chain,                                                                    
     including   expansion  of   natural  gas   liquefaction                                                                    
     facilities   in  the   Matanuska-Susitna  Borough   and                                                                    
     expansion  of natural  gas mains  and service  lines in                                                                    
     Fairbanks and North Pole.                                                                                                  
     Authorization  for issuing  these bonds  was originally                                                                    
     scheduled to expire June 30,  2018. Through the efforts                                                                    
     led by  Rep. Thompson and  former Senator Pete  Kelly -                                                                    
     the  Alaska   Legislature  extended  access   to  AIDEA                                                                    
     bonding an additional five years to June 30, 2023.                                                                         
     Given  market conditions  and  turmoil  related to  the                                                                    
     COVID-19 pandemic, IGU has  paused the final investment                                                                    
     decision on  its Titan liquid  natural gas  (LNG) plant                                                                    
     expansion project located in  the Mat-Su Borough, which                                                                    
     will necessitate access to AIDEA bonds.                                                                                    
     Bonds  of $136  million  of the  original $150  million                                                                    
     authorized  may be  issued to  provide up  to the  $275                                                                    
     million financing cap authorized under SB23.                                                                               
     HB  307 extends  the authorization  for AIDEA  to issue                                                                    
     IEP-related bonds for an additional  five years to June                                                                    
     30, 2028.                                                                                                                  
     Members will  find in their packets  letters of support                                                                    
     for HB  307 from AIDEA  as well as the  Fairbanks North                                                                    
     Star  Borough and  the  January  2022 quarterly  report                                                                    
     from AIDEA  to the legislature  on the progress  of the                                                                    
JOE HARDENBROOK, STAFF, REPRESENTATIVE GRIER HOPKINS,                                                                           
provided a sectional analysis on the bill (copy on file):                                                                       
     Section 1:                                                                                                                 
     Amends  the  uncodified  law of  the  State  of  Alaska                                                                    
     enacted in 2013  to replace the expiration  date of the                                                                    
     authority of AIDEA to issue bonds in support of the                                                                        
     project from June 30, 2023, to June 30, 2028.                                                                              
     Section 2:                                                                                                                 
     Contains an immediate effective date.                                                                                      
Representative   Carpenter   wondered    how   the   current                                                                    
announcement of a natural gas  pipeline from the North Slope                                                                    
to the Interior of Alaska impacted the IEP.                                                                                     
Representative   Hopkins  replied   that  the   IEP  project                                                                    
expanded natural  gas lines  throughout the  Fairbanks area.                                                                    
He emphasized  that the  Fairbanks area  needed to  be ready                                                                    
for the time  the gas line was completed.  He explained that                                                                    
when more affordable  gas was supplied from  the North Slope                                                                    
customers  would pay  a lower  interest  rate through  their                                                                    
utility  bill   by  extending  the  bonding   authority  and                                                                    
expanding the infrastructure.                                                                                                   
Co-Chair Merrick moved to invited testimony.                                                                                    
ELENA  SUDDUTH,  MANAGER,  CUSTOMER SERVICE  AND  MARKETING,                                                                    
INTERIOR  GAS UTILITY,  FAIRBANKS (via  teleconference), was                                                                    
in favor of HB 307. She  related that AIDEA and the Interior                                                                    
Gas Utility  (IGU) had been  working closely on  all aspects                                                                    
of  the  IEP  that  included  liquefaction,  transportation,                                                                    
storage,  regasification, and  distribution of  natural gas.                                                                    
She listed the ways both  entities had advanced the project.                                                                    
Fairbanks  Natural Gas  and IGU  had  consolidated into  one                                                                    
natural  gas utility  to extend  the  availability of  lower                                                                    
cost  energy  to  as  many   businesses  and  residences  as                                                                    
possible.  She delineated  that approximately  215 miles  of                                                                    
natural  gas distribution  lines had  been installed  to the                                                                    
core non-attainment  areas of Fairbanks and  the North Pole.                                                                    
In  Fairbanks, 1,550  residential  and commercial  customers                                                                    
were using natural gas. The  natural gas utility could serve                                                                    
8,500  properties if  everyone  with access  to natural  gas                                                                    
mains converted.  The North  Pole distribution  lines served                                                                    
125 customers with the main  lines reaching 3,000 commercial                                                                    
and  residential properties.  She furthered  that AIDEA  and                                                                    
IGU had  been working on  two storage projects. There  was a                                                                    
5.25 million gallon Liquified Natural  Gas (LNG) storage and                                                                    
gasification  facility that  was completed  in Fairbanks  in                                                                    
late  2019 and  a separate  150,000 gallon  LNG storage  and                                                                    
gasification facility  completed in the North  Pole in 2021.                                                                    
The  IGU's  customer base  had  increased  about 40  percent                                                                    
since  the   storage  facilities   were  completed   and  it                                                                    
anticipated  600 more  customers converting  to natural  gas                                                                    
for  heating in  2022. She  noted that  AIDEA   bonding  was                                                                    
critical to  the continuing success  of the project.  As the                                                                    
customer base grew, IGU would  need to utilize further AIDEA                                                                    
bonding to add approximately 100,000  gallons per day of LNG                                                                    
capacity  to the  present output  of the  Titon Liquefaction                                                                    
Facility located  in the Mat-Su Borough.  The existing plant                                                                    
had a capacity of about  50,000 gallons per day. The utility                                                                    
planned to utilize AIDEA bonding  to expand more natural gas                                                                    
mains  into more  neighborhoods in  the Fairbanks  and North                                                                    
Pole  communities.  The  bonding  authority  was  not  fully                                                                    
utilized due  to the COVID-19 pandemic,  resulting oil price                                                                    
drop, and economic uncertainty.  She anticipated needing the                                                                    
bonding  over the  following few  years.  The bill  provided                                                                    
additional  time for  the IEP  to progress  and realize  the                                                                    
project's  goal  of  affordable   natural  gas  to  as  many                                                                    
customers as possible.                                                                                                          
3:22:12 PM                                                                                                                    
Co-Chair Merrick  set an amendment  deadline for HB  307 for                                                                    
Wednesday, April 13, 2022, at noon.                                                                                             
Representative  Hopkins thanked  the  committee for  hearing                                                                    
the bill.                                                                                                                       
HB  307  was  HEARD  and   HELD  in  committee  for  further                                                                    
3:22:57 PM                                                                                                                    
The meeting was adjourned at 3:22 p.m.                                                                                          

Document Name Date/Time Subjects
SB 9 Intent letter to AMCO Director_lic conversion and auctions 04.04.22.pdf HFIN 4/8/2022 1:00:00 PM
SB 9
SB 9 Amenement Pkt. 1 - 27 040722.pdf HFIN 4/8/2022 1:00:00 PM
SB 9